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Debt vs Indebtedness vs Obligation vs Liability vs Debit vs Arrear

Debt, indebtedness, obligation, liability, debit, arrear mean something, and especially a sum of money, that is owed another.

Debt usually implies that the amount is owed in return for goods, property, or services and can be definitely computed or, if something other than money is owed, that it equals in value if not in kind the thing sold or the service given.

Indebtedness is applied either to the total amount owed one’s creditors or a single creditor.

Obligation, which is chiefly a legal term in this sense, implies a formal agreement to pay a certain amount or to do something or an acknowledgment of such an agreement (as by a contract or a bond).

Liability is an accountant’s term used chiefly in reference to general balance sheets of a company or corporation and is the opposite of asset. It is also used of the affairs of individuals especially in bankruptcy actions. It applies to any amount which constitutes an item of indebtedness.

Liabilities include accounts payable, accrued interest, taxes, such obligations as notes, bonds, and debentures, and even capital stock.

Debit is also a term in accounting for any item shown on the left side of an account; it usually designates a purchase and its price and is opposed to credit, or any entry on the right side (that is, for an article returned or an amount paid on account).

Arrear especially in its plural arrears usually implies that some of a debt, but not all, has been paid, but it always implies that the amount owed is overdue.